ORDER

*1 In advance of the pretrial conference, the Court issues the following decisions on the motions in limine that can be decided without further argument.

Plaintiff's Motion in Limine (exclude various personal-information evidence). Lerch seeks to exclude evidence of her “immigration application and status, personal whereabouts, or job situation, personal IRS filings” as irrelevant. R. 83, Lerch Mot. Limine at 10.[1] She also seeks to exclude her will (Gov. Exh. 3), because it lacks two witnesses and is thus invalid under Illinois law. Id. at 7. The government opposes the motion, arguing that these categories of evidence are all relevant to whether Lerch holds the Riverside property as a nominee of William Lerch (who is now deceased). R. 84, Gov. Resp. Lerch Mot. Limine at 1-2.

The evidence is indeed relevant to the nominee analysis. To determine whether Lerch holds the Riverside property as a nominee, the Court will have to consider her financial ability to contribute to the purchase and upkeep of the property (including her income, assets, and other expenses); her relationship with her husband; information about where she lived and worked; and any evidence about what she and William intended to do with the property. The five-part nominee analysis that both sides seem to agree applies to this case, see United States v. Northern States Investments, Inc., 670 F. Supp. 2d 778, 788 (N.D. Ill. 2008), includes considerations that will be illuminated by the evidence. Specifically, Lerch's “personal whereabouts” are relevant to whether she had control of the property; her job situation, immigration status, and IRS filings are relevant to whether she could afford the property on her own; and her will is relevant to whether she consistently treated the property as her own. Of course, none of the factors are by themselves dispositive—but the test for admissibility is just relevance.

Lerch contends that the “key issue” in the case is “the title of her property.” R. 87, Lerch Reply at 1. But determining whether Jingqiu is William's nominee requires the Court to look beyond legal title. The government asserts that even though the title to the property is formally in Lerch's name, Lerch was ultimately just holding the property for William Lerch, and the property really belonged to him. So Lerch's title to the property is only part of the inquiry (though it is highly relevant). The Court must also consider the nature of Jingqiu and William Lerch's relationship, how they used the property after it was purchased, who controlled it, and why it was purchased in Jingqiu's name in the first place. See North States Invs., Inc., 670 F. Supp. 2d at 788-89 (setting out the factors courts consider when determining whether a property holder is a nominee of someone else); R. 59, Summary Judgment Order (explaining the unresolved factual questions that must be examined at trial in this case).[2]

*2 To the extent that Lerch objects to this evidence based on foundation for the records, the Court will consider her objections at trial, when the government will be expected to provide sufficient foundation. The same goes for any evidence that Lerch seeks to explain more fully, or previous statements that she wishes to retract: Lerch can explain the evidence or her previous statements at trial. But for the purposes of this pre-trial motion, it is clear that the evidence is likely to be relevant to the factual issue in this case: whether Lerch is William Lerch's nominee.

As to Lerch's will, Lerch is correct that wills must generally be signed by two credible witnesses to be valid under Illinois law. 755 ILCS 5/4-3. But whether the will is valid as an instrument for conveying property is a separate question from whether it is admissible in this trial. The will's lack of testamentary effect does not make it irrelevant to whether Lerch held the property as a nominee.

Defendant's Motion in Limine (bar Lerch from calling Joseph Stewart as a witness): The government seeks to bar Lerch from calling Assistant United States Attorney Joseph Stewart as a witness because of the advocate-witness rule and Lerch's failure to disclose Stewart during discovery. R. 78, Gov. Mot. Limine at 1-3. Lerch opposes the motion and argues that because of Stewart's role in the case it would be unfair to exclude his testimony. R. 82, Lerch Rep. Gov. Mot. Limine.

The motion is granted. First, Lerch's failure to timely disclose Stewart as a witness during discovery as required under Federal Rule of Procedure 26(a) and 26(e) bars her from calling him at trial. Lerch has not established that her failure to disclose Stewart during discovery was “substantially justified” or “harmless.” Fed. R. Civ. Pro. 37(c)(1). In fact, because calling Stewart as a witness might disqualify him from continuing to represent the United States in this case under the advocate-witness rule, the United States would likely suffer significant harm if he testified.

The government is correct that compelling Stewart to testify could create a conflict under the advocate-witness rule. The rule “generally bars an attorney from acting as both an advocate and a witness in the same proceeding except under special circumstances.” United States v. Jones, 600 F.3d 847, 861-62. (7th Cir. 2010). Compelling Stewart to testify might require the Court to disqualify him from representing the United States in the case going forward. See ABA Model Rule 3.7(a). Given the potential consequences of requiring Stewart to testify, the Court must carefully scrutinize whether his testimony is truly relevant and necessary. Cf. Owen v. Wangerin, 985 F.2d 312, 317 (7th Cir. 1993) (stating that “disqualification is a drastic measure which courts should hesitate to impose except when absolutely necessary”) (cleaned up);[3] Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721-22 (7th Cir. 1982) (disqualification “motions should be viewed with extreme caution for they can be misused as techniques of harassment.”).

Here, the testimony that Lerch proposes to elicit from Stewart is either irrelevant or unnecessary. Lerch makes two broad arguments for compelling Stewart's testimony. First, Lerch argues that Stewart should testify because he was involved in various aspects of the investigation, including deposing both her and William and filing the nominee lien in 2011. Lerch Resp. Gov. Mot. Limine ¶¶ 1, 4-7. But Stewart's testimony about the investigations is not necessary. Information about the investigations can be provided by the financial investigator for the United States, Alex Pulles, who will be testifying at trial. Also, the records that Pulles and Stewart obtained in the course of the investigation will be subject to examination through Pulles. Lerch will have the opportunity to cross-examine Pulles and to present her own evidence about the investigations. (It almost goes without saying that, because the government has moved to excuse Stewart from testifying, the government of course cannot introduce testimony or records for which Stewart is the necessary witness to lay foundation.)

*3 Second, Lerch argues that Stewart's motivations for filing the nominee lien in the first place were harassing, that he ignored evidence favorable to Lerch throughout the investigations, and ultimately that he should be held accountable for conducting a “witch hunt.” Id. ¶¶ 1-7. But Stewart's motivation for conducting the investigations or filing the nominee lien are not relevant to the factual issue of whether Lerch was William Lerch's nominee: they do not make it more or less probable that Lerch held the property as a nominee in the first place. The bottom line is that Stewart is not a necessary witness in any event. The motion to prevent Lerch from requiring Stewart to testify is granted.

Footnotes

[1]

Citations to the record are noted as “R.” followed by the docket number and the page or paragraph number.

[2]

The government argues that some of the evidence at issue is “relevant to determine whether or not Lerch had any ability to afford to maintain the Riverside property after William's death.” Gov. Resp. Lerch Mot. Limine at 2. As the Court understands it, Lerch argues that her ability to maintain the property after William's death is not relevant to the nominee analysis. Lerch Reply at 2. Lerch's ability to maintain the property does have some limited relevance to the nominee analysis: whether Lerch could afford to maintain the property on her own might bear on whether she was truly holding it for herself. If Lerch believes that she could afford to keep it up on her own, then she should present that evidence at trial.

[3]

This order uses (cleaned up) to indicate that internal quotation marks, alterations, and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations, 18 Journal of Appellate Practice and Process 143 (2017).

Lerch v. U.S.

Citation: 2018 WL 11476515 (N.D. Ill. 2018)

Summary: The court found that the ESI, such as Lerch's immigration application and status, personal whereabouts, job situation, personal IRS filings, and her will, were all relevant to the nominee analysis and should be considered at trial. The court also granted the defendant's motion in limine to bar Lerch from calling Assistant United States Attorney Joseph Stewart as a witness.

Court: United States District Court, N.D. Illinois, Eastern Division

Date decided: November 29, 2018

Judge: Chang, Edmond E.

Jingqiu Mao LERCH, Plaintiff, v. UNITED STATES of America, Defendant No. 15 C 08646 United States District Court, N.D. Illinois, Eastern Division Signed November 29, 2018 Counsel Jingqiu Mao Lerch, Riverside, IL, Pro Se. Joseph A. Stewart, United States Attorney's Office, Chicago, IL, Scott Dennis Heffron, Asst. United States Attorney, Chicago, IL, for Defendant. Chang, Edmond E., United States District Judge ORDER *1 In advance of the pretrial conference, the Court issues the following decisions on the motions in limine that can be decided without further argument. Plaintiff's Motion in Limine (exclude various personal-information evidence). Lerch seeks to exclude evidence of her “immigration application and status, personal whereabouts, or job situation, personal IRS filings” as irrelevant. R. 83, Lerch Mot. Limine at 10.[1] She also seeks to exclude her will (Gov. Exh. 3), because it lacks two witnesses and is thus invalid under Illinois law. Id. at 7. The government opposes the motion, arguing that these categories of evidence are all relevant to whether Lerch holds the Riverside property as a nominee of William Lerch (who is now deceased). R. 84, Gov. Resp. Lerch Mot. Limine at 1-2. The evidence is indeed relevant to the nominee analysis. To determine whether Lerch holds the Riverside property as a nominee, the Court will have to consider her financial ability to contribute to the purchase and upkeep of the property (including her income, assets, and other expenses); her relationship with her husband; information about where she lived and worked; and any evidence about what she and William intended to do with the property. The five-part nominee analysis that both sides seem to agree applies to this case, see United States v. Northern States Investments, Inc., 670 F. Supp. 2d 778, 788 (N.D. Ill. 2008), includes considerations that will be illuminated by the evidence. Specifically, Lerch's “personal whereabouts” are relevant to whether she had control of the property; her job situation, immigration status, and IRS filings are relevant to whether she could afford the property on her own; and her will is relevant to whether she consistently treated the property as her own. Of course, none of the factors are by themselves dispositive—but the test for admissibility is just relevance. Lerch contends that the “key issue” in the case is “the title of her property.” R. 87, Lerch Reply at 1. But determining whether Jingqiu is William's nominee requires the Court to look beyond legal title. The government asserts that even though the title to the property is formally in Lerch's name, Lerch was ultimately just holding the property for William Lerch, and the property really belonged to him. So Lerch's title to the property is only part of the inquiry (though it is highly relevant). The Court must also consider the nature of Jingqiu and William Lerch's relationship, how they used the property after it was purchased, who controlled it, and why it was purchased in Jingqiu's name in the first place. See North States Invs., Inc., 670 F. Supp. 2d at 788-89 (setting out the factors courts consider when determining whether a property holder is a nominee of someone else); R. 59, Summary Judgment Order (explaining the unresolved factual questions that must be examined at trial in this case).[2] *2 To the extent that Lerch objects to this evidence based on foundation for the records, the Court will consider her objections at trial, when the government will be expected to provide sufficient foundation. The same goes for any evidence that Lerch seeks to explain more fully, or previous statements that she wishes to retract: Lerch can explain the evidence or her previous statements at trial. But for the purposes of this pre-trial motion, it is clear that the evidence is likely to be relevant to the factual issue in this case: whether Lerch is William Lerch's nominee. As to Lerch's will, Lerch is correct that wills must generally be signed by two credible witnesses to be valid under Illinois law. 755 ILCS 5/4-3. But whether the will is valid as an instrument for conveying property is a separate question from whether it is admissible in this trial. The will's lack of testamentary effect does not make it irrelevant to whether Lerch held the property as a nominee. Defendant's Motion in Limine (bar Lerch from calling Joseph Stewart as a witness): The government seeks to bar Lerch from calling Assistant United States Attorney Joseph Stewart as a witness because of the advocate-witness rule and Lerch's failure to disclose Stewart during discovery. R. 78, Gov. Mot. Limine at 1-3. Lerch opposes the motion and argues that because of Stewart's role in the case it would be unfair to exclude his testimony. R. 82, Lerch Rep. Gov. Mot. Limine. The motion is granted. First, Lerch's failure to timely disclose Stewart as a witness during discovery as required under Federal Rule of Procedure 26(a) and 26(e) bars her from calling him at trial. Lerch has not established that her failure to disclose Stewart during discovery was “substantially justified” or “harmless.” Fed. R. Civ. Pro. 37(c)(1). In fact, because calling Stewart as a witness might disqualify him from continuing to represent the United States in this case under the advocate-witness rule, the United States would likely suffer significant harm if he testified. The government is correct that compelling Stewart to testify could create a conflict under the advocate-witness rule. The rule “generally bars an attorney from acting as both an advocate and a witness in the same proceeding except under special circumstances.” United States v. Jones, 600 F.3d 847, 861-62. (7th Cir. 2010). Compelling Stewart to testify might require the Court to disqualify him from representing the United States in the case going forward. See ABA Model Rule 3.7(a). Given the potential consequences of requiring Stewart to testify, the Court must carefully scrutinize whether his testimony is truly relevant and necessary. Cf. Owen v. Wangerin, 985 F.2d 312, 317 (7th Cir. 1993) (stating that “disqualification is a drastic measure which courts should hesitate to impose except when absolutely necessary”) (cleaned up);[3] Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721-22 (7th Cir. 1982) (disqualification “motions should be viewed with extreme caution for they can be misused as techniques of harassment.”). Here, the testimony that Lerch proposes to elicit from Stewart is either irrelevant or unnecessary. Lerch makes two broad arguments for compelling Stewart's testimony. First, Lerch argues that Stewart should testify because he was involved in various aspects of the investigation, including deposing both her and William and filing the nominee lien in 2011. Lerch Resp. Gov. Mot. Limine ¶¶ 1, 4-7. But Stewart's testimony about the investigations is not necessary. Information about the investigations can be provided by the financial investigator for the United States, Alex Pulles, who will be testifying at trial. Also, the records that Pulles and Stewart obtained in the course of the investigation will be subject to examination through Pulles. Lerch will have the opportunity to cross-examine Pulles and to present her own evidence about the investigations. (It almost goes without saying that, because the government has moved to excuse Stewart from testifying, the government of course cannot introduce testimony or records for which Stewart is the necessary witness to lay foundation.) *3 Second, Lerch argues that Stewart's motivations for filing the nominee lien in the first place were harassing, that he ignored evidence favorable to Lerch throughout the investigations, and ultimately that he should be held accountable for conducting a “witch hunt.” Id. ¶¶ 1-7. But Stewart's motivation for conducting the investigations or filing the nominee lien are not relevant to the factual issue of whether Lerch was William Lerch's nominee: they do not make it more or less probable that Lerch held the property as a nominee in the first place. The bottom line is that Stewart is not a necessary witness in any event. The motion to prevent Lerch from requiring Stewart to testify is granted. Footnotes [1] Citations to the record are noted as “R.” followed by the docket number and the page or paragraph number. [2] The government argues that some of the evidence at issue is “relevant to determine whether or not Lerch had any ability to afford to maintain the Riverside property after William's death.” Gov. Resp. Lerch Mot. Limine at 2. As the Court understands it, Lerch argues that her ability to maintain the property after William's death is not relevant to the nominee analysis. Lerch Reply at 2. Lerch's ability to maintain the property does have some limited relevance to the nominee analysis: whether Lerch could afford to maintain the property on her own might bear on whether she was truly holding it for herself. If Lerch believes that she could afford to keep it up on her own, then she should present that evidence at trial. [3] This order uses (cleaned up) to indicate that internal quotation marks, alterations, and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations, 18 Journal of Appellate Practice and Process 143 (2017).